KYC/IDV checks for onboarding clients cover a lot of ground. Firms need to assess against requirements for anti-money laundering, categorisation, suitability and appropriateness across a multiplicity of countries with different laws and regulatory regimes. Additional rigour is being brought to bear through changes such as MiFID 2 and MLD 5 – and who knows what will happen post Brexit? Despite the complexity of the requirements, there is still a need to get to the answers speedily and this can be a challenge. Many firms are still making this journey using the equivalent of a hand-operated railway pump-trolley, with processes which are almost entirely manual. Others use technology to support some of the processes, yet require multiple providers to address the various steps- the equivalent of a steam train journey with at least one change of train en route. Romantically nostalgic perhaps, but not well suited to the world of international business.
Why Is There Still a Reliance on Manual Processes?
One reason for many firms’ reliance on largely manual processes has been the complexity of the requirements when applied to a wide variety of clients, which require the assessment of scenarios involving both client and product restrictions and information in multiple countries and regulatory regimes. Accepted wisdom has been that automation of complex requirements falls into the ‘too difficult’ category and demands excessive resources to both build and maintain. However, the risks entailed in current processes include those of human error, of incorrect assessments by individuals and of missing or misinterpreting which requirements apply to each client and product combinations. Consequently, there is an additional need for resource, not only to perform and make detailed checks on the assessments but also to employ experts who are able to analyse and assess the underlying regulations and laws in this changing environment.
NorthRow & muinmos Partnership
We provide a different approach. The partnership of NorthRow and muinmos supports the full onboarding journey through services linked by API, which provide the full range of checks from one set of inputs in a matter of minutes. The coverage is multi-national, with AI navigating the routes required to assess both the client and the permitted products into which they can invest. New regulation and legislation are incorporated into the processes as changes arise, applying in-house legal and regulatory expertise to analyse and apply the updates.
We understand that firms need to be able to evidence and to spot-check the results, so we provide comprehensive documentation of the checks made and conclusions drawn. This documentation can be used to prove robust processes and the correct outcomes to auditors and regulators in addition to explaining the assessments to clients and their relationship or investment managers. We stand by the assessments that we provide. In fact, we are so confident in our processes that we will go to court with you if you are challenged on the results of your KYC checks!
Given this level of expertise and support, coupled with the speed and ease of taking clients through the onboarding process, we encourage you to get on board yourselves, relax and enjoy the journey.